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McDowell among most distressed

Economic ranking could help industry recruiting

By Mike Conley | The McDowell News

Published: December 1, 2009

The N.C. Department of Commerce is now ranking McDowell as among the 40 most economically distressed counties in the state. The new ranking will qualify McDowell for a variety of state funding opportunities that can help it develop the local economy and create new jobs.
N.C. Commerce Secretary Keith Crisco announced the county tier designations for 2010. The designations, which are mandated by state law, determine a variety of state funding opportunities to assist in economic development.
"Our goal is to encourage economic development statewide so all of our residents can find sustainable, well-paying jobs regardless of their location," Crisco said. "The tier designations provide strong tools to help make our less prosperous counties more attractive to businesses looking to relocate or expand."
Using a formula outlined in the 2006 Tax Credits for Growing Businesses, the N.C. Department of Commerce assembles statistics for each of the state's 100 counties, applies the formula and assigns a tier designation ranking from one to three. Tier 1 counties are the most economically distressed and Tier 3 counties are the least. Eligible businesses that locate in the lower-tiered counties are eligible for some grant programs and larger tax credits than those that locate in higher-ranked areas.
Nine counties will change their tier designations for 2010 and McDowell is one of those. Cumberland, Onslow, Pender and Wilson each moved up to a higher tier. Alexander, Craven, Haywood, Lincoln and McDowell each moved down one tier to a lower ranking for the coming year.
Although the new ranking lists McDowell as among the most critical, it is actually good news for the county. The Tier 1 ranking will help McDowell recruit new industries. It will also help the existing ones that are looking to expand and hire new workers.
County officials said the new ranking is overdue.
"On the projects that we are working with now, this change helps," said County Manager Chuck Abernathy, who is also the county's economic development director. "This change matters. We have communicated to those companies that the tier ranking has changed. It is an incentive to locate jobs in the most depressed areas."
The N.C. Department of Commerce had previously listed McDowell as a Tier 1 county. Then about a year ago, the state upgraded McDowell to a Tier 2 status. That happened after the county suffered a string of plant closings and lost jobs. As a result, the McDowell County Commissioners sent a letter to the state requesting that McDowell should be again listed as a Tier 1 county.
"We had a 12 percent unemployment rate and we were upgraded to a Tier 2," said Abernathy. "We are back where we should be."
The Tier 1 ranking increases the tax credits available for companies that choose to locate in McDowell and create new jobs. It also increases the tax credits available for existing firms that plan to expand their operations and hire more people.
"These are not dollars," said Abernathy. "These are tax deferrals for both existing and new companies if they add jobs."
Tier designations determine the available amount of tax credits for job creation and business property investment in a list of eligible industries. They include manufacturing, motorsports, aircraft maintenance and repair, air courier services, warehousing, customer service call centers, research and development, electronic shopping and mail order houses, wholesale trade and information technology.
In a Tier 1 county, a $12,500 tax credit per new job is available with a requirement to create at least five jobs. A 7 percent tax credit is also available for eligible business property expenditures.
The law calls for the 40 most distressed counties to become Tier 1 counties, the middle 40 counties to be designated as Tier 2 and the 20 most prosperous counties to become Tier 3 counties. In the rankings for the coming year, there was a tie for the 80th spot resulting in 41 Tier 2 counties and 19 in Tier 3.
The rankings are based on an assessment of each county's unemployment rate, median household income, population growth and assessed property value per capita. In addition, any county with a population of less than 12,000 or a county with a population of fewer than 50,000 residents with 19 percent or more of those people living below the federal poverty level automatically are designated as among the most distressed counties.
All eligible companies are required to offer employees health insurance and pay at least 50 percent of the premiums, cannot owe back taxes and cannot have received a significant environmental violation notice from the state Department of Environment and Natural Resources.